Placeholder Image

字幕列表 影片播放

  • Apple recently reported their earnings for the first fiscal quarter of 2020, and the

  • numbers surprised some analysts.

  • Apple has had some of their most profitable quarters ever in the last year thanks to the

  • sales success of the iPhone 11, but it's also worth mentioning the struggles they've

  • faced in the process.

  • Because remember that the biggest Apple-related news story in 2016 was the decline of their

  • hardware sales, especially when it came to the iPhone.

  • After a decade of record-setting growth, demand for the device finally fell.

  • And not just for one quarter, but three quarters in a row.

  • That resulted in Apple's revenue shrinking by almost ten percent, causing the company

  • to post an annual revenue decline for the first time in fifteen years.

  • So how did Apple go from shrinking iPhone sales in 2016, to surging sales in 2019?

  • Well that's exactly what we're going to find out.

  • This is Greg with Apple Explained, and I want to thank Squarespace for sponsoring this video.

  • If you want to help decide which topics I cover, make sure you're subscribed and voting

  • polls like this one will show up in your mobile activity feed.

  • Now in order to understand how the iPhone 11 reignited Apple's sales success in 2019,

  • we first have to learn about what caused Apple's revenue slowdown to begin with.

  • And as I mentioned in the intro, that trend began in 2016 while the iPhone 6s served as

  • Apple's flagship smartphone.

  • It was during this time that the company started to notice slowing sales of not only the iPhone,

  • but the Mac and iPad too.

  • Mac sales dropped by seventeen percent and iPad sales by six percent.

  • And because of this slowing growth across the board, Apple announced in 2018 that they'd

  • no longer be sharing unit sales of their hardware and instead only reveal revenue earned.

  • That way, they could prevent news outlets from running negative headlines likeAre

  • slow iPhone sales just a blip, or is Apple starting to struggle?”

  • But it wasn't only about slowing hardware sales, it was also about where those sales

  • were happening.

  • Because around 2015 Apple identified two emerging markets where they'd like to expand their

  • presence, China and India.

  • But there was a problem.

  • Domestic phones in those countries are much less expensive than international devices

  • like the iPhone.

  • And it has a lot to do with the extra tariffs and taxes imposed on imported devices.

  • And that's exactly what prompted Tim Cook to visit India for the first time back in

  • 2016.

  • He wanted to negotiate with their prime minister Narendra Modi and reduce the tariffs Apple

  • had to pay to get their iPhones to market in India.

  • But Modi didn't budge on his position, and that prevented Apple from seeing increased

  • sales success in the country.

  • A similar situation played out in China.

  • Although iPhones were viewed as a desirable, luxury device, most Chinese customers considered

  • it an unnecessary expense.

  • Mainly because the app called WeChat, which everyone in China uses to do almost everything,

  • is available on iOS and Android.

  • So there isn't much of a reason for users in China to spend hundreds more on an iPhone

  • rather than a more affordable Huawei phone.

  • So as a response to slowing sales and failed attempts at capitalizing on foreign markets,

  • Apple began increasing hardware prices across the board.

  • By 2018, the Mac Mini, MacBook Air, iPad Pro, and even accessories like the Magic Mouse,

  • Magic Keyboard, and Apple Pencil all received price hikes in a way that was unprecedented

  • in Apple's history.

  • But there's one product in particular I want to focus on, and that's the iPhone.

  • Because the price increases it received was quite significant.

  • In 2016, the flagship iPhone 7 cost $650.

  • One year later, the iPhone 8 was priced at $700, a $50 premium.

  • But the iPhone 8 wasn't even Apple's flagship device, that title belonged to the iPhone

  • X, released the same year.

  • And that premium model carried a record price tag of one-thousand dollars.

  • That's $350 more than the flagship iPhone 7 released just one year earlier.

  • But Apple didn't stop there, they pushed the iPhone's price even higher with the

  • XS Max in 2018, which retailed for $1,100.

  • But it wasn't only the premium iPhone models that ballooned in price.

  • The so-calledbudgetiPhone XR did as well, coming in at $750, which was $50 more

  • than the iPhone 8, and $100 more than the 2016 flagship iPhone 7.

  • And this dramatic rise in the iPhone's cost took a toll on sales, with the iPhone XR suffering

  • from less pre-orders compared to previous models, weaker demand, and two separate cuts

  • to iPhone production within two months.

  • It was clear that customers were getting tired of paying more for iPhones year after year,

  • and so in 2019 Apple made a decision that not many people were expecting.

  • They actually reduced the iPhone's price for the first time in over a decade.

  • The iPhone 11 received a $50 price drop compared to the previous iPhone XR, coming in at $700.

  • And that made all the difference when it came to sales performance.

  • Now when it comes to performance, I'd like to give you guys an update on how my new website

  • is performing since I redesigned with Squarespace.

  • Traffic to my site is actually up over 100% compared to last year which is great since

  • I'm capturing more people from google searches who are then redirected to my YouTube channel

  • or social media accounts.

  • Now Squarespace is my favorite website builder to use since it has the highest number of

  • website templates to choose from and they're all optimized for mobile so I didn't have

  • to do any extra work optimizing my site for smartphones or tablets.

  • And when I wanted to sell a merch product I was able to add an e-commerce store to my

  • site without starting over from scratch.

  • Plus the payment processor was built in and I could print shipping labels straight from

  • Squarespace as well.

  • It really is an all-in-one platform designed to do almost anything you can imagine.

  • And you can get all this for cheaper than you might think, especially if you use the

  • link squarespace.com/appleexplained since you'll get 10% off your first purchase,

  • you can find that link in the description.

  • Alright now as I mentioned earlier Apple no longer reports unit sales of their products,

  • so we're forced to rely on third party analysts to make as accurate predictions as possible.

  • But we're fairly certain that in the first month of sales, the iPhone 11 outsold the

  • XR by about fifteen percent, with twelve million units sold.

  • This outperformed even the most generous predictions by analysts, and led to Apple increasing production

  • of the iPhone 11 by 1.6 million units.

  • But the iPhone 11 wasn't only experiencing sales success in the US, it was also doing

  • well in the emerging markets that Apple had tried to capitalize on in 2016.

  • For example, in China, the iPhone 11 drove a sales increase of 18.7% compared to the

  • previous year.

  • And this number is especially impressive for a few reasons.

  • First, the overall smartphone market in China experienced a 13.7% decrease during the same

  • period, proving strong demand for the iPhone despite a declining market.

  • Second, Apple had been struggling to stay afloat in China amid a trade war with the

  • US and Chinese governments, with both countries threatening increased tariffs on imported

  • products.

  • And although Apple escaped the economic effects of this trade tension, they didn't escape

  • the social implications of being an American company selling products in China.

  • You see, in addition to trade disputes, the US government banned domestic telecommunication

  • companies from buying foreign equipment due to national security concerns.

  • That meant Chinese companies like Huawei couldn't sell their technology to US companies like

  • AT&T or Verizon to develop their 5G infrastructure.

  • And if that didn't upset the Chinese government enough, President Trump also signed an executive

  • order banning Huawei from buying US technology without government approval.

  • So companies like Google were no longer allowed to offer apps like Google Play on Huawei devices.

  • And all these actions against China caused an anti-American movement among some of their

  • citizens, who set their sights on US companies like Apple, igniting a boycott and a declaration

  • of Huawei's superiority.

  • So when you consider this hostility toward Apple among Chinese citizens, the trade tensions

  • between the US and Chinese governments, and the country's declining smartphone market,

  • Apple was expected to suffer a fifty percent drop in Chinese iPhone sales in the second

  • half of 2019.

  • But the iPhone 11 was such a compelling device, that it managed to defy unprecedented odds

  • in such a significant way that Apple achieved sales growth in China for the first time since

  • 2015.

  • And that achievement alone is incredible, but things become even more impressive when

  • considering the Indian market.

  • As I mentioned earlier, Tim Cook visited India back in 2016 as part of an effort to boost

  • sales in the country, but 2017 and 2018 saw no significant returns on the company's

  • investment.

  • And that's likely due to the extraordinarily high price of the iPhone in a market that's

  • very price sensitive.

  • But Apple wasn't standing idly by during that time.

  • They actually began assembling the iPhone XR in India with the help of Foxconn's facility,

  • which allowed Apple to finally avoid the tariffs and penalties associated with imported products.

  • This resulted in a 35% price drop for the iPhone XR in 2019, and combine with the lower

  • price of the iPhone 11, Apple was able to turn around its sales performance in India

  • by doubling its market share from one to two percent.

  • And although that may not sound significant, the Indian market in one of the largest in

  • the world.

  • So a company growing their market share by one percent in a year is quite impressive,

  • especially if that growth can be sustained into the future.

  • Now we've covered how the iPhone 11 was able to turn around Apple's sluggish sales

  • domestically and internationally and prove to be a very successful product for Apple.

  • But something you may be asking yourself, is why?

  • Why was the iPhone 11 able to deliver all this success for Apple and not models that

  • came before it like the iPhone XR or iPhone 8?

  • Well, I think there were many variables at play, but the foundation of the iPhone 11's

  • success can be attributed to the fact that it hit the sweet spot of what consumers wanted

  • from an iPhone.

  • It had the same incredible camera features as the premium iPhone 11 Pro, except for 2x

  • optical zoom.

  • It had even better battery life than the previous XR, it featured a glass design that was more

  • durable than ever before, and all of these features came at a cost that was lower than

  • any iPhone since the 8.

  • A model that paled in comparison to the feature set that the 11 offered.

  • Now what did all of this sales success mean for Apple?

  • Well, the company ended up earning $91.8 billion in revenue for its first fiscal quarter of

  • 2020, which actually ran from September to December 2019.